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FEIDAY, NOVEMBER 6, 1885. 



RECENT PROGRESS IN POLITICAL 

 ECONOMY. 



It has long been evident to close observers of 

 current thought and discussion that the so-called 

 science of poUtical economy is in a state of tran- 

 sition. The old authorities have begun to lose 

 their hold on general regard and esteem. Ricardo, 

 Malthus, and ]\iill no longer hold the pre-eminent 

 position once accorded to them. Untn veithin a 

 few years of IVIill's death, the statement might 

 have been truthfully made that nearly every 

 prominent thinker in the field of economics in 

 England, France, and Germany, was an adherent 

 of the so-called orthodox school of political econ- 

 omy. Economics was regarded as one of the most 

 exact and severe of sciences, and as having 

 reached a most advanced stage of its development. 



The reaction began ia Germany early in the 

 fifties by the rise of the historical school, and 

 increased so rapidly that German thought was 

 soon completely emancipated from the domination 

 of Enghsh authority in this field. The movement 

 was slower in England ; but it had made such 

 progress before Mill's death, that even MiU himself 

 had begun to be influenced by it, and was con- 

 vinced that many of his views were untenable. 

 He openly confessed his conviction that one of his 

 fundamental doctrines, that of the wage-fund 

 theory, was false, and adopted a very different 

 theorem in its place. 



So steady and general was the defection in the 

 ranks of the orthodox, and so vigorous were the 

 attacks on the stronghold of the faithful, that the 

 pubhc soon lost all confidence in the scientific 

 character of political economy. This was strik- 

 ingly manifested, a few years ago, when a move- 

 ment was started ia the British association for 

 the advancement of science, to abolish the eco- 

 nomic section of that body on the ground that 

 there was no such thiag as a science of political 

 economy. This movement was met, on that oc- 

 casion, by the memorable address of Professor 

 Ingram, which revealed, for the first time, how 

 completely the later thinkers had broken with the 

 old views. The growing influence of the writings 

 of such men as Cliffe Leslie shows how ripe the 

 time is for a new start in this field, while the 

 recent jjublication of the work of the lamented 

 Toynbee indicates the existence of a school of 



thinkers in the very centre of Oxford and Cam- 

 bridge, who are in hearty sympathy with the new 

 movement. 



The same tendency to break away from the 

 old moorings is plainly seen among the younger 

 men in this country. It is to be clearly discerned 

 in the tone of newspaper writing done by those 

 who have come under the influence of this new 

 movement. It is evident at all the centres of 

 learning where the modern scientific spirit has 

 been allowed access to this field. It came plainly 

 to light in the organization of the new American 

 economic association formed at Saratoga in Sep- 

 tember last, where it was clear that the men 

 interested in the enterprise believe that pohtical 

 economy is still in a rudimentary state, and that, 

 if it is ever to attain to the rank of a universally 

 acknowledged science, it must leave the purely 

 abstract and a priori methods of the early econ- 

 omists, and have recourse to the same general 

 methods of investigation which have achieved so 

 much in modern natural science. 



Perhaps the most striking evidence, however, 

 of the untenableness of the old system, and the 

 imperative necessity for a new, is to be found, not 

 in the attacks of the opponents of ' orthodoxy ' in 

 the economic field, but in the present attitude of 

 its defenders. For a time they took almost no 

 notice of the defection from their ranks, or of the 

 growing numbers of their opponents, or, if they 

 did notice it, it was done in that supercihous way 

 which is universally characteristic of conscious 

 infallibility. But a great change has come over 

 the spirit of their dreams. They are now finally 

 aroused, and the result of their awakening is to 

 be found in a series of attempts ' to restate the 

 fundamental doctrines of the science in a less ob- 

 jectionable form.' As a matter of fact, when 

 they get the doctrines fauly 'restated, so as to 

 correspond more closely to the actual conditions 

 of our modern industrial fife,' the restatement is 

 so different from the original theory that the 

 latter is scarcely any longer to be recognized in it. 



This is eminently true of the httle work by Mr. 

 Bagehot. ^ The author examines in the two essays 

 of which the book consists, and wliich were origi- 

 nally published in the Fortnightly review, two of 

 the postulates of the English orthodox school of 

 economics, with the idea of restating them with 

 such modifications as he thought they needed in 



1 The postulates of English political economy. By Walter 

 Bagehot. New York, Putnam, 1885. 8°. 



